How to Trade Forex Using Support and Resistance

Support and resistance trading is a core concept in forex analysis. These levels represent areas where price frequently reacts, making them valuable for planning trades.

Identifying Support and Resistance

Support and resistance levels are identified by observing historical price reactions on the chart. Repeated touches increase their reliability.

Trading Bounces

Traders can enter buy positions near support and sell positions near resistance when price shows rejection signals.

Breakout Trading

When price breaks a strong support or resistance level, it often leads to strong market momentum.

Risk Management

Using stop-loss orders beyond key levels protects traders from false breakouts.

Conclusion

Support and resistance trading is simple yet powerful when applied with discipline and proper risk management.